“We’re building out, not up, and facilitating infrastructure,” Union Pacific public affairs director Zoe Richmond told a Wednesday morning meeting of the New Mexico chapter of Certified Commercial Investment Members, a commercial real estate group.
The Omaha, Neb.-based railroad has so far spent about $150 million of the more than $400 million budgeted for what it calls the Strauss facility, a major way station on its Los Angeles-El Paso “Sunset Route,” Richmond said. Site preparation began in August 2011 with the movement of 6 million cubic yards of soil. Completion is scheduled in 2015.
The railyard will have three main functions: fueling and servicing, a layover for crew changes, and a intermodal train-to-truck freight facility linked to a planned industrial park. The crew-change function will result in the likely construction of restaurants, motels and other amenities, Richmond said.
The intermodal component of the railyard, which will employ about 200 at opening and another 400 down the road, has the greatest potential for an economic development impact.
“We’re aggressively trying to recruit companies to expand and locate in New Mexico,” she said, adding the national attention that the project has attracted has “really put New Mexico on the map.”
Trains and trucks are the two main alternatives for the long-haul movement of freight in volume. While transportation by truck is faster and more streamlined, rail is cheaper and more fuel efficient.
“When diesel prices go up, long-haul trucking becomes less competitive,” Richmond said.
The key that opened the door for the Strauss facility was state legislation passed in 2011 that will give Union Pacific a deduction in gross receipts tax and compensating tax for locomotive fuel. Effective in mid-2013, the legislation was contingent on the railroad building the facility.
Many states including Texas don’t tax locomotive fuel, Richmond said. If the legislation hadn’t passed, Union Pacific’s backup plan was to build two smaller facilities in Texas.
The Strauss facility will not replace the railroad’s existing railyard in El Paso, although some operations in El Paso will be relocated to Strauss.
— This article appeared on page B1 of the Albuquerque Journal